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NLMK likely to see limited impact from drone attack at coke plant

Monday, 26 February 2024 16:29:15 (GMT+3)   |   Istanbul
       

According to media sources, NLMK, one of the largest steelmakers in the Russia, which also has assets outside the country, suffered damage over the weekend as a result of an attack by unmanned drones. Ukraine’s security and military services have taken responsibility for the attack in the framework of the ongoing war, started by Russia against Ukraine on February 24, 2022. While NLMK has not been available for comment regarding the numerous photos and videos of the fire at one of its units, it is widely believed that the attack was made on the company’s coking plant. “We need to find out more, but I’m afraid it is just a sting and they will bring coke from some other place. If it were a blast furnace, that would be a different case,” an international trader told SteelOrbis.

Currently, market players are trying to assess the possible outcomes for the mill and the market in general. While NLMK is not commenting, market sources believe that, if there are certain disruptions in coke production, they will likely be minor and temporarily covered by alternative sources, including those inside Russia or from nearby countries like the CIS. Some believe that, if the problem takes a while to be fixed, some raw material deliveries can be made from Iran since it is considered to be Russia’s ally in the ongoing war. Overall, the production disruptions, if any, are likely to first have an effect on the domestic market, which takes a bigger share of NLMK’s flat steel production, while exports have been minimized for several months. According to the market sources which contacted NLMK, the producer replied: “All shipments will be done according to the settled timelines, especially for exports.”

In addition, theoretically the consequences of the attack at NLMK may lead to some shifts in the slab market, particularly in the EU, where the mill has continued sending its semis once the quota had been adjusted and prolonged. If the coke plant issue takes a while to be fixed, there could be some disruptions in slab export shipments, which may force buyers to seek alternatives, which are current priced much higher. However, many sources believe this is an unlikely scenario. “Anyway, the slab market is so weak at present that it would not even matter,” a source said.


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